Experience and Expertise Proves CCIMs are Invaluable Investment Real Estate Business Partners
There are a multitude of details to be properly handled in any complex commercial real estate transaction. Thus, considering an investment in real estate, the investor would be well advised to engage the services of a Certified Commercial Investment Member (CCIM), a recognized commercial real estate professional.
A team of professionals from various disciplines should be assembled to concentrate on specific aspects of a transaction. A CCIM, as a member of this team, is best able to understand the components of the transaction and to shepard the activities of everyone in concert toward a successful conclusion for the investor.
A CCIM has the professional training, education and experience to serve the members of the investment-decision team, which should include the investor’s lawyers, accountants and bankers. A CCIM is able to see the transaction as more than merely the buying, selling or leasing of a particular piece of real estate. He or she will view the situation as finding a solution to a problem expressed by the buyer or seller.
Before discussing the specifics of the parcel of real estate the investor is interested in, a CCIM will first focus on the motivations, goals, experience, needs and fears of the client regarding real estate investment. These early discussions will include the investor’s long-range plans, including retirement plans. From these discussions, an idea of the return on investment the client desires will be determined. Also of primary importance, a CCIM can determine the appropriate time for the eventual disposition of the property and the alternative methods available: sale, exchange or refinance.
The expert analysis of the investor’s situation by a CCIM will also reveal the investor’s comfort level with the risks/rewards of each of the disposition alternatives. This will determine what form of ownership should be considered and what type of real estate should be acquired. It may be decided, as a result of the analysis, that a REIT or a limited partnership, as opposed to sole ownership, would be most appropriate.
Following the decision on what property or properties will be targeted by the investment team, the data gathering begins. Among the data that is assembled is information on tax law changes, financing alternatives and other pertinent facts. While a CCIM is not expected to be a tax accountant or attorney, he is expected to be familiar with these areas and to use the knowledge to negotiate the best terms with the client’s banking resources.
When all the various professional disciplines work in concert for the client’s benefit, the result of their coordinated efforts, orchestrated by a CCIM, should be a real estate transaction that will serve the investor well in the present and in the future.
The CCIM Institute, Chicago, confers the Certified Commercial Investment Member designation through an extensive curriculum of 200 classroom hours in addition to professional experiential requirements. CCIMs are recognized experts in commercial real estate brokerage, leasing, asset management, valuation, and investment analysis, and form a business network encompassing 1,000 markets throughout North America, Europe, Asia and the Caribbean. Of the approximately 125,000 commercial real estate practitioners nationwide, more than 9,000 currently hold the CCIM designation, with nearly 10,000 additional professionals pursuing the designation.
Scridb filterFlex Space
Commercial property that is flexible enough in its design to allow for a variety of office, retail, and/or industrial uses, “flex space,” has come a long way since its low-budget beginnings. Originally it was built as a way to hedge speculative commercial real estate developer’s bets on landing a wider range of possible tenants. In the past ten years, however, it has become its own distinct category that can command its own market lease rates.
So what is the official definition of flex space? CoStar, a national database and information exchange for the commercial real estate industry, says it is “a building designed to be versatile and may be used in combination with office, research and development, quasi-retail sales, industrial processing or high tech.” Flex buildings are usually one or two stories high with at least half the space designed for office layout, ceiling heights that can go up to 16 feet, and has some sort of overhead door delivery options (either grade level or dock high delivery doors).
The real strength of flex space is its versatility. If a company has an office use, it can build out the space with a drop ceiling. If there is a need for some retail sales, the company can create a showroom. With the current fashion favoring urban, industrial looks, this can be readily achieved in flex buildings. On the other hand, if the company needs a production, processing, or warehousing, it can use the higher ceilings to rack inventory. Some other advantages flex space has over more traditional office spaces are:
- Uses can be mixed in a single location thereby eliminating the need for multiple sites and redundancy in support staff.
- Often the tenant will have more control over their space’s utilities.
- There is not usually a common area to pass through, so the access is more direct.
- The tenant controls the security of the space which is an advantage for personal and business security since limited access points make it easier to record all ingress and egress to the building and parking is closer.
- Flex space’s lease rates are usually quite a bit less than typical office space.
With these lower lease rates, flex spaces had traditionally been considered budget space for budget-conscious companies, but that has changed. Today it is neither simply considered a less expensive office space option, nor a more expensive warehouse space. The business community has proven that the benefit of flex space goes well beyond cheap and kinda’ pretty. The strength of its versatility and the value that brings to its owners is a better definition of this category.
Scridb filterBenefits of Utilizing a Tenant Agent
If you are considering leasing commercial real estate to house and grow your business, you will want to obtain the appropriate expertise to help make your experience a profitable and enjoyable one. Commercial brokers vary in focus and expertise: some specialize in listing properties for landlords; others are transaction facilitators; still others focus specifically in helping tenants. This article addresses the different types of commercial brokers and the benefits of working with a tenant agent.
Types of Brokerage Relationships. Colorado real estate law allows commercial leasing brokers to work in three distinct capacities:
- Landlord Agent
- Transaction Broker
- Tenant Agent
By Colorado law, Landlord Agents exclusively represent the landlord’s interests. Transaction Brokers assist both the tenant and the landlord throughout the transaction without advocating for either party. Tenant Agents exclusively represent the tenant’s or buyer’s interests. With all these choices, how do you decide which type of broker is right for you?
Landlord Agents develop their expertise in marketing office, industrial and retail space. A good landlord agent is knows how to best present his/her property and get leases signed. Transaction Brokers are skilled in the art of facilitating. They are adept at considering the goals of both the landlord and the tenant, and figuring our ways to meet both these sets of needs. Tenant Agents develop their expertise in the areas of relationship-building and advocacy. The tenant agent’s role is to understand both the financial and non-financial goals of his or her client, and to skillfully advocate for the client-tenant.
Cost and Savings. Regardless of relationship category, leasing brokers are generally paid one-half of the listing broker’s commission for bringing a tenant to the table and helping consummate a lease. Usually, leasing brokers are compensated by the landlord’s listing broker. The leasing broker is paid a success fee, typically in the 2.5 to 5% range, when a lease transaction occurs. This fee is built into the cost structure of the rents so you, as tenant, do not pay a higher rent for utilizing a tenant agent. Having tenant agent represent you will not cost your more…it could save you significant time and money.
Value Proposition. The tenant agent’s job is to position you in the market so that landlords are competing to have you in their building. This competitive process allows the markets to do their job producing the most attractive lease opportunities. Reduced rental rates, increased tenant-finish allowances, renewal options and free rent are optimized for the tenant when landlords are in competition for your business. And in today’s soft market landlords are fiercely competitive, so it pays to have them competing for your business.
What Landlords Look For From Tenants. If you are a Tenant looking for new office, retail, industrial, or flex space, what can you do to present yourself to property owners in the best way to give yourself an advantage during the lease negotiation? Here are a few suggestions:
- Business Plan – Even if you’ve been in business for years, providing the framework of your business is always appreciated. If you’re a new business, Landlords are duly impressed with even the basic rudiments of a business plan. It demonstrates that you are serious about your enterprise and it gives everyone a sense of security about your company’s ability to not only pay the bills, but also to grow and prosper.
- Financial Statements (both business and personal) – Some Tenant’s cringe when this one is demanded. Their finances are typically quite private and a request to see them is somewhat akin to asking them to undress in public. Your broker should help you with this by providing forms that can be less disclosing, suggest ways to limit the presentation, and request assurances of confidentiality. But your ability to show financial wherewithal will, without question, help your case for negotiating a better lease than if you just claim that you have enough money in the bank to cover the rent.
- Background Information and a Résumé – Securing space for your business is not unlike many of the other applications you’re going through setting up your business. Often, the more personalized you can make this process the better it will be for you. Hand over as much of the marketing materials on your business as you can. Supplying your professional resume’ often helps a local Landlord recognize you not only as a source of rental income, but also as a person with a past and intentions for a future.
- Letter of Intent (LOI) or Request For Proposal (RFP) – These things have been discussed forever in this column. Most legal professionals can’t stand them; most agents like to use them on a daily basis. It is critical to their implementation that it understood that they are not legally binding, but they are a strong first step in the negotiation process. Unlike legally binding contracts there is rarely any money involved with an LOI or an RFP, but they are signed by the parties involved and become a part of the file for the transaction.
- Your Own Lease – The vast majority of lease transactions that happen in this market are done with the Landlord’s lease. But if you have a lease that you have been party to in the past and found that it was a fair one, provide it as a part of the negotiation. It’s highly doubtful that the prospective Landlord will use it (quite likely they have invested more money than they care to talk about with their own legal counsel preparing the lease they want to use!) but providing one of your own demonstrates an intention that is far too uncommon in this business. This document needs to be offered with the initial application package. If it’s brought in later, it probably won’t mean much of anything to the Landlord.
Other Benefits. In addition to helping you negotiate the best lease rate and terms, a tenant agent is a ‘connector’ as well. He/she connects you with the expertise you need, including knowledgeable real estate attorneys, furniture suppliers, phone/data professionals, sign vendors, space-planners and contractors. Lastly, the tenant agent’s job is to make the process enjoyable to you, the tenant. Most business people get involved with leases only once every several years. The tenant agent deals with commercial leasing on a daily basis. The tenant agent’s job is to be your experienced guide and trusted advisor, so that you, the tenant, can relax and enjoy the process, knowing your interests are well cared-for.
Mark Casey is founder of Casey Partners, Ltd. Greentech Property A d v i s o r s ™ , headquartered in Boulder. Mark holds a Master of Business Administration (MBA) from the University of Virginia, and is a graduate of the Authentic Leadership Program at Naropa University. He is a member of Commercial
Brokers of Boulder and Denver Metro Commercial Association of Realtors. For more information, visit www.caseypartners.com or call 303-665-6000.
American Recovery and Reinvestment Act of 2009 and Commercial Real Estate
On February 13, 2009 the 111th Congress passed the American Recovery and Reinvestment Act (ARRA) in order to address the greatest economic crisis we find ourselves in since the Great Depression. It is, by far, the largest stimulus bill of its kind, and will impact virtually all sectors the U.S. economy. Here is a diagram showing how $787 Billion is being spent:
You will note, there are no bubbles labeled “Commercial Real Estate.” However, the commercial real estate sector will feel the bill’s direct effect through provisions in the bill pertaining to energy efficiency, renewable energy and SBA lending. Indirectly, commercial real estate will benefit from infrastructure spending roads, highways and bridges, and on money invested to build power transmission lines and update the nation’s aging electrical grid.
The $43 Billion of Energy spending includes money to encourage energy efficiency and renewable energy in commercial buildings. The bill provides investment tax credits and grants, in addition to accelerated depreciation programs to encourage energy efficiency and on-site renewable energy. Combining the benefits of ARRA with the existing Xcel Solar Rebate program make now the time to evaluate your commercial building for solar electric, solar thermal and/or on-site wind generation.
Renewable Energy Tax Incentives. The ARRA includes $20 billion in energy tax incentives. An investment tax credit is available for the tax year in which energy property is placed in service. The tax credit is based on 30 percent of the cost of the solar and/or small wind property.
Grants in Lieu of Energy Credits. The ARRA allows taxpayers to apply for a grant when they place specified energy property in service in lieu of claiming investment tax credits. The grant will reimburse the taxpayer for part of the expense of the facility. The ARRA authorizes the Treasury Secretary to provide a grant to any taxpayer that either: (1) places the property in service during 2009 or 2010, or (2) places the property in service after 2010, but only if the construction of the property began during 2009 or 2010 and is completed before the credit termination date with respect to that property.
If you are considering adding renewable energy to your building, your first step is an energy audit. An energy audit will establish your baseline and help you to create an energy plan for your building. Generally, a good plan call for the implementation of energy efficiency measures before moving to renewables.
SBA Loans. Both the SBA 7(a) and 504 Programs can be used for purchasing commercial real estate which will be at least 51% owner-occupied. These programs allow for financing up to 90% of the appraised value of the commercial property. In the past, the primary reason business owners have shied away from purchasing real estate with these loan programs is up-front fees. The ARRA authorizes temporary fee reductions (until September 30, 2010) under the 7(a) loan guarantee program and temporary fee eliminations under the 504 loan program.
Putting the Stimulus Bill to Work for You. If you are a building owner this is the time to make your energy efficiency and consider investing renewable energy. Be sure to consult with your CPA to make sure you qualify for the renewable energy tax credits or grants, and the accelerated depreciation. It is also a time to talk with you tenants, find out how they are doing, and to do everything you can, as landlord, to help them succeed. If you are a tenant, who has always wanted to own your space, now may be the time. With SBA fees reduced, historically low interest rates and depressed prices, opportunities abound for you to become an owner of commercial real estate.
Learning More. We are blessed here in Boulder and along the Front Range, in being a technology center for sustainability, green building and renewable energy. If you have a question about how energy efficiency, renewable energy, or tax incentives/rebates can be applied to your commercial real estate situation, drop us a line at info@caseypartners.com, and we will get your question answered or place you in touch with someone who can.
* Tax Relief – includes $15 B for Infrastructure and Science, $61 B for Protecting the Vulnerable, $25 B for Education and Training and $22 B for Energy, so total funds are $126 B for Infrastructure and Science, $142 B for Protecting the Vulnerable, $78 B for Education and Training, and $65 B for Energy. State and Local Fiscal Relief – Prevents state and local cuts to health and education programs and state and local tax increases. More details are available on the www.recovery.org website.
Scridb filterBoulder
To look for homes for sale and real estate in Boulder is to begin a search for the Colorado lifestyle.
Boulder, Colorado, located at the base of the Rocky Mountains, is noted for its progressive views and cutting edge public policies, however, that also has led more conservative types to refer to the city as "25 square miles surrounded by reality."
You can find a sampling of homes for sale in Boulder, CO to the right. Or use the link below those listings to get full search results for real estate for sale in Boulder.
But Boulder is much more.
A noted destination for runners, hikers, cyclists, mountain bikers, climbers and outdoor enthusiasts, the city of 103,000 residents is home to a host of world-class athletes and Olympians. Runners and bikers clamor to Boulder and its trails to train.
The University of Colorado — with about 29,000 students and boasting Division I athletic teams, the CU Buffaloes, competing in the Big 12 — is a premier research university.
Boulder is home to several federal labs and research institutions, among them the National Institute of Standards and Technology, the National Oceanic and Atmospheric Administration and the National Center for Atmospheric Research.
Boulder also is renown for its dining scene, boasting scores of restaurants including the nationally known Frasca, The Kitchen, the Flagstaff House, L’Atelier, Mateo and Q’s.
- Pearl Street
- Twenty-Ninth Street Mall
North, South and East Recreation Centers, YMCA, The Spot Climbing Gym, dozens of community parks, open space, dog parks
Population: 91,685
Population density: 3,884.1 /sq mi
Median Household Income: $44,748
Avg. household size: 2.19
Age distribution:
- 7.8% are under 10
- 14.4% between 10-19
- 29.8% in their 20s
- 14.9% in their 30s
- 13.6% in their 40s
- 9% in their 50s
- 4.4% in their 60s
- 6.4% are over 70
Median age: 33
Relationship status:
- 38.6% married
- 49.1% single
- 8.8% divorced
- 3.5% widowed
Percent single: 27.5% of population are single males, 21.6% of population are single females
Homes with children: 18.7% have kids
Home Type:
- 70.1% single-family
- 21.9% condo
- 7.9% other
Owners v. Renters: 49.4% own; 50.6% rent
Avg. single-family home value:
- 1 BD – $370,000
- 2 BD – $400,000
- 3 BD – $494,000
- 4BD – $639,000
Avg. condo value:
- 1 BD – $156,000
- 2 BD – $212,000
- 3 BD – $307,000
- 4BD – $415,000
Home size in Sq. Ft.:
- 1,000 or less – 21.8%
- 1,000-1,400 – 18.9%
- 1,400-1,800 – 15.1%
- 2,300-2,800 – 20%
- 2,800-3,600 – 18.1%
- more than 3,600 – 6%
Median home size: 1,644 sq. ft.
Year built:
- 2000-present – 5%
- 1980-1999 – 29.6%
- 1960-1979 – 45.7%
- 1940-1959 – 12.1%
- 1920-1939 – 3.2%
- 1900-1919 – 3.6%
- before 1900 – 0.7%
Avg. year built: 1972
Commute time:
- 20.2% – 10 min. or less
- 46.1% – 10-20 min.
- 14.4% – 20-30 min.
- 7.9% – 30-45 min.
- 6.9% – 45-60 min.
- 4.5% – more than 60 min.
Avg. Commute time: 20.508 min.
- July is on average the warmest month, with an average high temperature of 87 degrees.
- December and January are on average the coldest months, with average high temperatures at 46 degrees, and average lows at 21 and 19 degrees, respectively.
- April and May are on average the wettest months, with an average of about three inches of precipitation.
- The highest temperature on record was 104°F in 1954.
- The lowest temperature on record was -24°F in 1990.
Chautauqua
About Chautauqua
Chautauqua is an east Boulder, Colorado, neighborhood, bordered by Baseline Road on the north and Chautauqua Park to the west. It's one of Boulder's older neighborhoods, and is full of homes with unique architectural details.
Chautauqua Park is a favorite among tourists and locals alike. The park offers miles of hiking, biking and equestrian trails. Climbers scale the rugged walls of the Flatirons in summer and children enjoy sledding the hills in winter. The park is also home to the Chautauqua Dining Hall, a National Historic Landmark built in 1898, and a classic American restaurant. The Chautauqua Community House and Auditorium host concerts, silent films and more entertainment year round.
Residents of the Chautauqua neighborhood enjoy easy access to the University of Colorado, downtown Boulder and U.S. 36.
Scridb filterErie Commons
About Erie Commons
Located off the Leon A. Wurl Parkway in eastern Erie, CO, Erie Commons is a development of single-family homes, row homes and condominiums by Shea, Morrison and Standard Pacific Homes. The neighborhood is bordered on the east by parks and open space and the northern part of the community encircles the Erie Community Center and Erie Library.
The neighborhood's Lehigh Park contains a community swimming pool and the neighborhood also includes a developing retail and mixed-use sector.
Scridb filterBroadlands
About Broadlands
Broadlands is a country club community located in Broomfield, Colorado, that includes a range of building options, from custom-built homes to town homes.
The focal point of the community is Broadlands Golf Course, a 117-acre, 18-hole championship course that winds throughout the neighborhood. Broadlands also boasts community parks with covered picnic areas and soccer fields and eight miles of trails that connect the neighborhoods. The Broadlands Community Center offers a pool, spa and workout facilities. Plaster Reservoir offers boating and fishing in the warmer months.
Broadland's location provides easy access to Boulder, Denver, the airport and shopping.
Students attend Adams County Schools.
Scridb filterDowntown Longmont
About Downtown Longmont
The historic downtown Longmont district houses more than 300 businesses, restaurants and organizations. The area attracts thousands to annual parades and festivals.
Scridb filterDowntown Boulder
About Downtown Boulder
Perhaps best known for it's shopping, dining and entertainment district, the Pearl Street Mall, downtown Boulder, Colorado, is a unique city center in a very unique town. Downtown Boulder abuts the Rocky Mountain foothills, with spectacular views of the Flatirons and bordered on the southern edge by scenic Boulder Creek.
Pearl Street Mall is a four block pedestrian-only mall, lined with red brick and filled with colorful flowerbeds, shade-providing trees, historic buildings and an ever-changing cast of musicians and street performers. Visitors take advantage of a large selection of shops and restaurants.
The area bustles year-round with festivals, farmer's markets and locals and tourists alike shopping, dining or just out for a stroll. Downtown residents can walk to just about everything, including the nearby Ideal Market and Wild Oats supermarkets.
Recreation enthusiasts flock to the Boulder Creek Path for running, cycling and skating. In summer, the Creek fills with enthusiastic tubers, kayakers, fishermen and waders. Residents enjoy nearby open space and parks.
Downtown Boulder is one of the oldest residential neighborhoods in the area and many of the homes are charming and historic. Large trees and ornate Victorian homes line the streets.
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